Portugal - Selling and buying

Reaching the consumers

Marketing opportunities

Consumer behavior: The purchasing behavior of the Portuguese consumer is mainly determined by: - advertising (TV and radio, due to car journeys) - the value for money of after-sales service for cars and household appliances - price (especially for food and hygiene purchases) - social status symbols (clothes, fashion, cars) - the environmental aspect is still secondary, but is becoming more important among young people, who are more receptive to the awareness campaigns in the press. - brand names, associated with this aspect of social status.

Consumer profile: Besides peaks times such as Christmas, consumption has slowed down over the last 2 years due to a drop in available income. The increase in taxes, especially VAT (21%), and the high level of debt in Portuguese families (120% of income), limit consumption greatly. The majority of Portuguese people are conservative, loyal to brands (especially for clothes, less so for foodstuffs). They are impulsive consumers, but less so at the present time, as the level of household debt has reached alarming heights, which is slowing down consumption. Consumer credit harasses the Portuguese with invasive advertising. By tradition, and also through a lack of a real estate rental market, the Portuguese invest in bricks and mortar, and for that they seek a bank loan, and borrow to pay for cars too. A large proportion of monthly household income is usually spent on paying for these services. Things are changing with regards to preference for domestic or foreign goods; apart from wine and cheese (for which the Portuguese have difficulty choosing imported products), preference is almost always for imported goods. An awareness campaign has recently been launched to encourage people to buy domestic products.

The institutional buyer is quality conscious and very sensitive to pricing. Most tenders consider price first and quality second.

Distribution network

Evolution of the sector: Modern forms of distribution appeared very late in Portugal compared with other European countries. The modern distribution market appeared in 1961 with the opening of the first supermarket in Lisbon. Until 1985, there were practically no hypermarkets or supermarkets and distribution was represented by a host of small retailers and traditional shops. It is only since 1981 that the market has grown, eliminating smaller local stores on the way. Distribution centers tend to be located in Lisbon and Porto, although many large importers and wholesalers have branch sales offices and/or sub-agents or dealers in other principal cities and towns.

Types of outlet: In 2004, hypermarkets represented 37% of distribution turnover, supermarkets 28%, local supermarkets 18.3% and local food shops barely 1.4%. 4 large groups share the market: - the Modelo-Continente group which belongs to the Portuguese Sonae and which specialises in hypermarkets; it has become the leader of food distribution in Portugal. - the Jeronimo Martins group: with a turnover of 3.4 billion euros in 2004, it is the second largest distributor in Portugal with the names Pingo Doce and Feira Nova. - the French group Auchan, present in Portugal from 1970 onwards, had a turnover of 1.04 billion euros in 2003. - the French group Carrefour, with a turnover of 470 million euros in 2004 and which has 1 hypermarket and 270 supermarkets. The other major trend over the last few years has been the development of specialized hypermarkets: FNAC, Bricodis, Habitat, Ikea have opened. These developments show that for the years to come there will be a constant decrease in traditional commerce and a growth in the modern forms of distribution especially hypermarkets and supermarkets which will extend their products and services more and more in the non-food sector.

Non tariff barriers: As it is a member of the European Union, Portugal enforces the Community regulations which are valid throughout the Union. The main non-Customs barrier is at the level of agricultural products, ensuing from the application of the CAP (Common Agricultural Policy).

Average Customs Duty (excluding agricultural products): Transactions carried out within the EEA are exempt from duties.
The Common Customs Tariff (CCT) of the European Union is applied to goods from outside the EU. In general, duties are not very high, especially for industrial products (4.2% on average).

Customs classification: Yes

Import procedures: The documents generally required by Portugal on all sea and air shipments include the commercial invoice, the bill of lading or air waybill, and a certificate of origin.

For goods of a value under 1 000kg or 1 000 euros, a verbal declaration at Customs, and presenting the invoice, is sufficient. For higher values, you must deposit at the Customs office: 1) a brief declaration (air or maritime manifest) to conclude the collection of the goods. 2) a common law declaration (SAD, single administrative document), as well as the accompanying documents to allow their clearance. The SAD form can be obtained from Chambers of Commerce or an approved printer. A computerized Customs clearance platform (SOFI: International freight computer system) can be accessed in Customs offices or in some Chambers of Commerce.

In the case of deliveries and purchases within the European Community, the declaration of exchange of goods (DEB) or Intrastat declaration must be sent to the Customs service.

As part of the "SAFE" standards advocated by the World Customs Organization (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Program eCustomer, has been in effect since January 1, 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.

The Modernized Customs Code (MCC) of the European Union simplifies various procedures such as introducing a paperless environment, centralized clearance, and more. For more information check the EU’s Customs website.

Organizing goods transport

Organizing goods transport to and from: Portugal wants to encourage private investors to come to the country and wants to modernize port infrastructures. Portuguese ports handle more than 60 million tonnes of goods each year. The road network is poor and considerable improvement is necessary. Goods are mainly transported by rail (2,585 million tonnes-km). Substantial investment is being considered to improve the electrification and rehabilitation of the main long distance routes : Lisbon-Porto, Lisbon-the Algarve and towards Spain to the North and East.